It is said to be the biggest settlement ever paid by a single company to the federal government. JP Morgan Chase has agreed to pay $13 billion to resolve a series of investigations and lawsuits related to mortgage abuses, in the years leading up to the 2008 financial crisis. To put it in perspective, that's about triple what BP paid for the Deep Water Horizon oil spill. The deal has been in the works for some time. The Justice Department officially announces it today.

NPR's business correspondent Jim Zarroli joins us now from New York. Good morning.

JIM ZARROLI, BYLINE: Good morning.

MONTAGNE: And Jim, remind us why JP Morgan is facing this huge penalty?

ZARROLI: Yeah. This has to do with those mortgage-backed securities that were sold in such big numbers by Wall Street for years. Essentially, you know, home loans that were pooled and turned into securities. They were really popular with investors until the crash. And then after the crash a lot of them lost a lot of value. State and federal regulators started looking into how they were marketed.

Some of the abuses were committed by Washington Mutual and Bear Stearns, both of which were acquired by J.P. Morgan Chase. So it's faced sort of a real quagmire of legal troubles and now it's settling the charges.

MONTAGNE: And how did the two sides, the bank and the federal government, agree on the figure of $13 billion?

ZARROLI: Well, they were talking about it for a long time. The talks, in fact, almost broke down recently because J.P. Morgan said it wanted to essentially pay some of those penalties it owed out of a federal deposit insurance corporation fund. The government didn't want to go along with that.

MONTAGNE: I spoke with a source who was familiar with the settlement who said that was resolved over the past two days. So then both sides, the government and J.P. Morgan Chase, were able to move on to resolve the last part of the settlement. And now the whole settlement could be announced as early as today.

And where, Jim, will the money paid by JP Morgan Chase go?

ZARROLI: Well, we don't know everything. I mean the government previously said that about $4 billion would go to the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, the mortgage companies. Yesterday I was told that another four billion will go to consumer relief. For instance, as much as 1.7 billion will go to homeowners who are underwater on their mortgages. In other words, they owe more than their home is worth. Some of it will go to restructure loans to reduce payments for borrowers.

J.P. Morgan Chase also agreed to spend some money to reduce blight in distressed areas by doing things like tearing down the abandoned houses. That last part of the agreement is sort of unprecedented. And then the bank also agreed to have an independent monitor sort of follow them to make sure they've made good on all these promises.

MONTAGNE: All right, well, does this resolve all of the legal claims against JP Morgan Chase?

ZARROLI: You know, it resolves a lot of them, not all of them. There are still some private lawsuits by investors and other banks. Also, U.S. officials can pursue charges against some of the individuals who were involved in mortgage fraud. And they've said they might do that. But in essence, you know, this really is a big step forward for J.P. Morgan Chase in terms of freeing itself from the legacy of the subprime mortgage crisis.

You know, and it's also really - the Obama administration has sometimes been accused of not pursuing mortgage fraud aggressively enough from the financial crisis. And these are really some of the toughest measures taken by the administration to date.